Bulletin: BP's 2018 Results Support Its Current Credit Ratios; Divestments Required To Achieve Debt Reduction In 2019-2020

MOSCOW (S&P Global Ratings) Feb. 5, 2019--S&P Global Ratings said today that the 2018 results announced by oil and gas supermajor BP PLC continue to support its 'A-' rating on the company. We project BP's adjusted funds from operations (FFO) to debt will remain at 30%-40% in 2019-2020, below the 40%-45% that we would see as commensurate with a higher rating. The stable outlook indicates limited rating upside or downside in the next 12-18 months. In 2018, BP's net debt increased by $6.3 billion, largely driven by the all-cash $10.5 billion acquisition of BHP Billiton assets in the U.S. (about $7 billion paid in 2018, with the rest to be paid by April 2019). Importantly, even without the acquisition, BP's

...MOSCOW (S&P Global Ratings) Feb. 5, 2019--S&P Global Ratings said today that the 2018 results announced by oil and gas supermajor BP PLC continue to support its 'A-' rating on the company. We project BP's adjusted funds from operations (FFO) to debt will remain at 30%-40% in 2019-2020, below the 40%-45% that we would see as commensurate with a higher rating. The stable outlook indicates limited rating upside or downside in the next 12-18 months. In 2018, BP's net debt increased by $6.3 billion, largely driven by the all-cash $10.5 billion acquisition of BHP Billiton assets in the U.S. (about $7 billion paid in 2018, with the rest to be paid by April 2019). Importantly, even without the acquisition, BP's reported free cash flow after capital expenditure (capex), dividends, and buybacks was negative at about -$1.0 billion. This reflects that the company's capex remains high compared with peers and that it continues to offset its scrip dividend with share buybacks. Although payments related...

Bulletin